As workers have returned to the workplace, urban housing costs have increased at a faster rate than in rural areas.
In 2020 and 2021, the epidemic and widespread adoption of working from home resulted in a “race for space” in Covid, forcing the prices of suburban and rural properties to skyrocket.
According to mortgage company Halifax, the tendency has reversed in most locations since the beginning of the year, meaning purchasers no longer prioritize larger homes with access to more green areas.
As individuals have progressively returned to work, housing prices in Britain’s cities have increased by 9.2% on average, compared to 7.9% in the surrounding areas.
In January of this year, the average house price in inner London boroughs was $573,559; by September, it had risen to £612,582, an increase of 6.8%.
In contrast, property prices in outer London boroughs climbed by only 4.6% over the same time period, a roughly 50% less increase.
In the north-west of the city, in the London Borough of Brent, property values have decreased by an astounding 8.4% this year.
Sheffield had the fastest growth of any city in the nation, with values increasing by 18.9%. In the surrounding area, the average price of a home increased by only 9.7 percent, from £192,090 to £228,353.
Additionally, Manchester, Liverpool, Edinburgh, Leeds, and Southampton have followed the trend.
As the tendency of working from home declines, so do rural and suburban home prices. Since the beginning of the year, property values in big cities (illustration: London) have increased by an average of 9.2%, but only by 7.9% in surrounding areas.
This year, property prices in cities have increased more rapidly than in surrounding areas in the United Kingdom.
Sheffield had the highest growth rate of any city in the country, while Middlesbrough’s prices declined by 2.2%.
The value of suburban homes increased by 7.9 percent. It signifies the end of the’space race’ established by the Covid lockdowns, in which buyers prioritized larger homes and more access to natural spaces.
In West Dunbartonshire, Scotland, home values have decreased by -0.7% from the beginning of the year.
A Knoxland Square, Dumbarton home with three bedrooms is advertised on Rightmove for almost £260,000.
However, the website indicates that the house was purchased earlier this year for £283,000, about one percent more than the current asking price.
Nearby in Glasgow, property prices have increased by 8.5%, with a typical three-bedroom home costing approximately £300,000.
Compared to the city, prices in the districts surrounding Norwich have only increased by 2.5%, while in the Broadland region they have declined by 1.2%.
In Necton, which is roughly a 40-minute drive from the city, a three-bedroom home is up for sale for £410,000.
However, according to Rightmove, a comparable detached home on the same road sold for the same price in January 2021.
Outside of Glasgow, in West Dunbartonshire (left) and outside of Norwich, home prices have declined (right)
This year, housing prices in Methyr Tydfill, a municipality located outside of Cardiff, have decreased by 3.5 percent.
A home with three bedrooms is advertised for £245,000 in the town, which is approximately 20 miles north of the Welsh capital, while a home with the same number of bedrooms on Trevithick Gardens sold for the same price in September 2021. In Cardiff, home prices have increased by 6.6%.
Halifax examined the inner and outer boroughs of Greater London to demonstrate that even the city is not immune to falling house values.
Compared to the inner boroughs, property prices in the borough of Brent decreased by 8.4%, while they increased by 6.8%.
A semi-detached house in Brent still fetches eye-popping prices, with a three-bedroom home selling for £1.6million – a decrease of 8.4% indicates that the property might have been worth an additional £130,000 at the beginning of the year.
Another house with the same amount of bedrooms sold for $2,050,000 in March of 2021, compared to £1,150,000 in March of 2018.
In certain areas of London, such as Brent, house prices declined by 8.4%, while prices in the inner boroughs grew by 6.8%.
Early on in the coronavirus pandemic, Andrew Asaam, director of mortgages at Halifax, saw that people were seeking greener areas to go to. This pattern has continued.
He stated, “This pattern did not totally disappear this year, since house price rise in these regions remained robust.”
‘However, as normalcy returned to many people’s lives, the possibility to live in cities once again became more appealing, hence increasing demand.
This is evident in locations across the nation, as property price inflation in the majority of cities exceeds that of their surrounding communities.
‘Clearly, the economic situation has changed significantly over the past few months, with the possibility of more considerable downward pressure on home prices, as the cost-of-living squeeze and rising borrowing costs restrain demand.
It is consequently uncertain to what degree these tendencies will continue to shape the housing market.
However, some locations defy the tendency. The surrounding areas of Birmingham have had a greater percentage increase in home prices than the city itself. This is reflected in areas such as Walsall, where home prices have increased by 16.4% so far this year, according to Halifax.
And in the North East of England, Newcastle, Sunderland, and Middlesbrough have experienced weaker house price rise than their neighboring areas so far this year.